The paper presents an instructional case on earnings quality. The case is based on a real‐life financial analyst's report on the acquisition of the U.S. publisher CCH by the Dutch publisher Wolters Kluwer. Although the analyst believed that CCH was a sound investment, he downgraded his buy recommendation on Wolters Kluwer because of the deterioration of earnings quality, caused by a seemingly unusual accounting method for restructuring costs following the acquisition. The questions for discussion address the differences between management and analysts in their preferred earnings patterns, the impact of goodwill accounting on earnings quality, the backgrounds and rationales for the earnings adjustments the analyst made, and whether cash flow accounting would solve the problem.

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